Crazy For "Obama Phones" - But Are They For Real?

In the video, an alleged Obama supporter screams about her "Obama phone" at a rally in Ohio. She tells a reporter, "Keep Obama in president, you know! He gave us a phone, he's gonna do more."

The video made news this week as taxpayers grow increasingly uncomfortable with the so-called "47%" - those folks who supposedly rely on the government for entitlements. Presidential hopeful Mitt Romney described those folks as:

[D]ependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it

She went on to shriek, "Everybody in Cleveland, low minorities, got Obama phones…"

It was a great sound byte. But it's deeply flawed. The "Obama phone" program she's touting doesn't give out free phones to minorities. And it wasn't started by President Obama. And this rumor isn't new.

As I reported months ago, there is a law in place to help low-income customers have access to basic telephone service. It's divided into two programs: Link-Up America and Lifeline.

Link-Up assists consumers with the installation costs of phone service. The program pays up to $30 of the cost of installation and up to $200 in the form of a one year, interest-free loan for additional installation costs.

Lifeline provides discounts on basic monthly service at a primary residence for qualified telephone customers. These discounts can be up to $10.00 per month, or more for certain Native Americans. Generally, to qualify, your income must be at or below 135% of the federal poverty guidelines (these vary by location and size of family but for comparison, rings in at $22,350 for a family of four in the lower 48).

In some instances, coverage may include discounts for cell phone service instead of land lines at primary residences because realistically, cell phone service is less expensive in some areas than traditional service. Eligibility and type of program may vary from state to state - and this is why there is a flurry of confusion about the program being a product of the Obama administration. In Florida, for example, cell phone service was added to the existing program - in 2008, the year that Obama was elected to office. The conclusion from many folks was that it was a new federal program. It was not. It was an expansion of the existing program and implemented on a state by state basis.

The federal program wasn't started by President Obama. It dates back to the 1980s and was significantly expanded in 1996, as part of the Telecommunications Act of 1996. The Act did a number of things, including increasing internet access to doctors and patients in rural hospitals (for consults with specialists); subsidizing internet and phone coverage for schools and libraries and providing free or subsidized coverage for families who can't afford it so that they have links to emergency and government services. The Act was not taxpayer funded… exactly. Taxpayers do pay for coverage but not via federal income taxes. Instead, the Act "mandated the creation of the universal service fund (USF) into which all telecommunications providers are required to contribute a percentage of their interstate and international end-user telecommunications revenues." So that little fee on your phone bill labeled USF? That's what you're paying for.

As a result, there is a bill in place to put an end to the practice. The bill, H.R. 3481, the Stop Taxpayer Funded Cell Phones Act of 2011, was introduced by Rep. Tim Griffin (R-AR) with three co-sponsors, Rep. Rodney Alexander (R-LA), Rep. Bill Posey (R-FL) and Rep. Dennis Ross (R-FL) on November 18, 2011. The bill now has 11 more co-sponsors, four of which joined this month. And since I know you're wondering: none of the co-sponsors are from Cleveland - or from Ohio. All of them are Republican.

The purpose of the bill, as stated is: "To prohibit universal service support of commercial mobile service through the Lifeline program."

The bottom line is that there is free phone assistance available to those who qualify but it is not an Obama administration program. Taxpayers do support the program but not through federal income taxes. And despite the screaming lady in the video, eligibility doesn't hinge on Social Security, disability or food stamps; there's no "buy one bag of chips, get an Obama phone free" promotion. Just because a woman holding a sign gets a microphone in her face doesn't make her statements true.